Passenger Leakage Study

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Passenger Leakage Study 2012 Passenger Leakage Study TAYGUS MANAGEMENT LTD. Box 2156 Dawson Creek BC 6/25/2012 TAYGUS MANAGEMENT LTD. Introduction The Dawson Creek Airport is continually looking to enhance air services available at the airport to better serve users in the South Peace Region. Improved air service generates many benefits to the community including enhanced access for business travellers, tourists, workers, vacationers and people visiting friends and relatives. By enhancing air transportation for residents, Dawson Creek is better able to attract and retain businesses and qualified personnel that benefit the community. Data on the travel characteristics of passengers from the Dawson Creek Region that use surrounding airports are required to identify new routes which would best serve travellers and have the greatest opportunity of success, and to identify candidate carriers to serve those new routes. This data is of prime importance in developing a business case for a new service to present to a prospective carrier. The results of this study will provide the Dawson Creek Airport with a better understanding of the travel patterns of people of the region, and potential for new or improved services. Current Air Services The Airport is currently served by two scheduled Airlines. Central Mountain Air (HawkAir) o Once daily direct flights to Vancouver and Fort Nelson Sunday through Friday. o Dash 8 service (schedule uses both 100 and 300 series aircraft). Northwestern Air o Once daily direct service to Edmonton and Red Deer 3 days per week. o Jestream 31 service. Catchment Area The catchment area for the Dawson Creek Airport (YDQ) is bordered by 2 other regional airports. To the north, the Fort St John Airport offers daily service by Air Canada Express with direct flights to Vancouver, as well as Central Mountain Air direct flights to Edmonton and Prince George. To the south, the Grande Prairie Airport offers daily service by both Air Canada Express and WestJet to Edmonton and Calgary. The primary catchment area for YDQ includes areas within the Peace Region where YDQ currently draws users and who would typically choose YDQ as their first choice if the desired air services were available. 2 | P a g e Dawson Creek Airport Passenger Leakage Study TAYGUS MANAGEMENT LTD. The primary catchment area extends from Chetwynd to the west, including the area of Moberly Lake, to Rycroft AB in the east, north to the Peace River, and south to Tumbler Ridge. Areas south along highway 43 in Alberta up to Hythe can also be included in this area, as the driving distance to Dawson Creek is similar to that of the Grande Prairie Airport. The total population of the primary catchment area, from 2011 census data is 31,500. The potential to expand the primary catchment area even further into the primary catchment areas of the Fort St John and Grande Prairie Airports is a possibility based on new air service development. YDQ offers a much lower fee structure than either of these airports, including not having an Airport Improvement Fee or public parking charges. Objectives The objectives of this study were to provide the Dawson Creek Airport with the following: Identification of total travel demand in the primary catchment area. Passenger diversion (leakage) to other airports, and potential to recapture. Primary travel destinations by passengers in the primary catchment area. 3 | P a g e Dawson Creek Airport Passenger Leakage Study TAYGUS MANAGEMENT LTD. Methodology Reliable ticket data is becoming increasing difficult to obtain as more people book their tickets directly with the airline. Airlines close guard information on the tickets they sell and this information is not available for analysing market demand. Methods for determining market demand must be continually updated as available data sources change and passengers use different methods to purchase their airline tickets. Statistics Canada has stopped publishing origin and destination passenger data for domestic trips. However it does provide other statistical information that includes propensity to travel. Sabre technologies have continually evolved its Airport Data Intelligence (ADI) over the past few years to include “point of sale” reports in addition to market segments. The Sabre database includes ticket information and includes all tickets sold by travel agents. All bookings by airlines using Sabre, such as WestJet, are included, as well as Sabre-related bookings on Internet sites such as Travelocity and Expedia. The program then uses known data to extrapolate through the total passenger traffic numbers to provide a detailed data set that provides an accurate picture of passenger travel at a particular airport or region. The data obtained through ADI for 2011 was then compared to the actual passenger traffic statistics as reported by the Dawson Creek Airport to ensure accuracy of the data set. In this case it was found that ADI was reporting within 92% of the total traffic as reported by YDQ. Estimation of Leakage Leakage of passenger demand from the primary catchment area to nearby airports, Fort St. John, Grande Prairie, Prince George, Edmonton and Calgary was estimated using two different approaches: propensity to travel and population of catchment area and information collected from Sabre ADI point of sale reports. The two approaches are described below. Propensity to Travel and Population of Catchment Area The number of passengers per head of population excluding connecting passengers was calculated for airports in Canada. This ratio is dependent on the propensity to travel by air of the population, but also on the ability of an airport to attract passengers from outside the catchment area and the level of leakage to nearby airports. A low ratio of passengers to total population is indicative of significant leakage, while a high value usually indicates significant demand is attracted from outside their primarily catchment area. Also, the propensity to travel by air does vary to some extent across the country due to, for example, location/isolation, high incomes and air service factors (frequency, fares, etc.), and this also needs to be taken into consideration. 4 | P a g e Dawson Creek Airport Passenger Leakage Study TAYGUS MANAGEMENT LTD. The number of one-way trips per person (i.e., local origin/destination (O/D) passengers divided by the population of the catchment area) were calculated for airports in Canada, based on 2011 data. The average one-way trips per person vary significantly by region and airport: Canadian Average 2.6 Average for 37 largest airports 3.5 Grande Prairie 4.5 Prince George 4.6 BC Average 4.2 Dawson Creek 3.1 The value for Dawson Creek is higher than the national average but is lower than surrounding airports. This would indicate that leakage is likely very high. Based on the values for the other airports in the region with similar population demographics a ratio of 4.2 would seem reasonable. This would indicate that approximately 61,000 O/D passengers are leaked from YDQ. Sabre ADI Point of Sale Data ADI point of sale data captures ticket sales that originate from other airports using both the city of sale as well as postal code information. This data is typically more accurate for tickets sold through travel agencies as well as local airlines, and includes both scheduled airlines and tour operators. For the purpose of this study, ticket sales were focused on the primary catchment area for Dawson Creek. Point of Sale data for five airports were looked at to determine the total leakage of O/D passengers from the YDQ area. The results are as follows: Grande Prairie: 17,490 Edmonton: 14,200 Prince George: 9410 Fort St John: 9120 Calgary: 8090 This provides a total leakage estimate based on ADI at 58,310 O/D passengers. Total Passenger Leakage from the Catchment Area The total passenger leakage of the primary catchment area, using the two methods described has a range of 58,310 to 61,000 O/D passengers per year. Once weighted, a figure of 59,000 O/D passengers per year that are flying out of other airports can be used. 5 | P a g e Dawson Creek Airport Passenger Leakage Study TAYGUS MANAGEMENT LTD. Market Demand of the Catchment Area Total market demand for the primary catchment area can be calculated by taking the actual O/D passenger statistics for YDQ in 2011 and adding in the total leakage for the same period. This would estimate the total area traffic at 76,000 O/D passengers. Final destination information from ADI reports, including the point of sale reports for leaked passengers shows the following top 10 O/D destinations travelled to by area residents: Vancouver 8960 Fort Nelson 7640 Calgary 7480 Edmonton 7310 Victoria 4320 Winnipeg 2210 Los Angeles 1814 Las Vegas 1650 Atlantic Canada 1635 Mexico 925 These destinations account for approximately 60% of all area traffic estimates. When the data was analysed, it was not surprising that the two destinations that already have direct service are at the top of the list, however when the passenger data to leaked airports was analysed, particularly for those passengers using Grande Prairie, the top destinations were Calgary and Edmonton. Market Potential In determining market potential for any new services a few factors need to be considered. A choice of airport by a passenger is determined by three key factors: Better flight schedule. Better Price. Non Stop Flight. In the case of the existing air service at YDQ, it is a market with limited schedule availability, to only a few destinations, with limited connectivity onward, and in what is an essentially single carrier served markets, a high airfare. Airfare out of YDQ to destinations is anywhere from 40 to 60% higher than airfares offered out of Grande Prairie, making Grande Prairie an easy choice for travellers who are not only price sensitive, but are looking for a choice of airlines offering a greater range of final destinations.
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